Especially prevalent in online competitive communities for less popular games.
Every time I’ve played Tetris Ultimate (3DS) online I’ve gotten wrecked by my opponents who appeared far more skilled than me. This wasn’t the matchmaking system trying to find its balance, since it happened consistently (and my rating kept going lower and lower). What I would assume to be the cause of this is the nearly empty player community.
When a game first comes out, a lot of people will be playing it. After a couple of weeks, this provides the perfect environment for competitive online play: players from all skill levels will be present online, and so it’ll be easy to find you a suitable match.
After a year or so though, the player-base will be much smaller. For the largest part, only the hardcore players will have remained, tipping the “average player skill” into very competent territory. All the less skilled players that remained (or newly arrive) will be scared away from the competitive scene by the heavy losses they suffer, depleting their side of the player-base even faster.
And that’s… kind of sad? I wonder how that can best be combatted in a way that isn’t just “let’s keep the player-base large and mostly fresh”.